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Unpledge Request Form

Also written URF · Unpledge Request Form (URF)

The prescribed form on which a pledgor asks its DP to close a pledge and release the securities, which the DP must retain for at least five years along with the PRF and IRF.

In plain language

A pledge does not close itself when a loan is repaid. Somebody has to formally ask for the securities back, in writing, on a specific form. That form is the Unpledge Request Form, or URF — CDSL's own name for a pledge closure request.

The pledgor fills it in and submits it through the same DP that set up the original pledge.

How it works

From Chapter 9, section 9.2.4 and Box 9.1: the pledgor submits the closure (unpledge) instruction in the prescribed form (URF) to its DP after performance of the underlying loan agreement. The DP verifies the form for completeness and validity, returns it for rectification if not in order, or accepts and acknowledges it, then enters the request against the pledge instruction number. The pledgee's DP obtains the pledgee's acceptance or rejection, also in a prescribed form. On acceptance, securities move from pledged balance to free/locked-in balance; on rejection, they stay pledged, with the reason — such as "Un-pledge/Closure date not accepted" or "Pledged quantity not accepted" — shown in the pledgor's DP system (CDSL uses a free-text remark field instead, not this listed set).

Box 9.1's checklist requires the DP to keep copies of every Pledge Request Form, Unpledge Request Form and Invocation Request Form for a minimum of five years, or any other period SEBI, NSDL or CDSL later prescribes.

A worked example

Mr Oberoi repays his loan in full and wants his 6,000 pledged shares released. He submits an Unpledge Request Form to his DP, which verifies it, accepts it, and enters the closure request against his pledge instruction number.

The pledgee bank's DP receives the details electronically and confirms acceptance in its own prescribed form. On that confirmation, the 6,000 shares move from pledged balance back to Mr Oberoi's free balance. His DP retains a copy of this URF, along with the original Pledge Request Form, for at least five years — exactly as it would an Invocation Request Form.

Why NISM asks about it

Chapter 9, section 9.2.4 and Box 9.1, set out the URF procedure and retention requirement. Expect the five-year retention period shared across the PRF, URF and IRF, and the listed rejection reasons an unpledge request can face — absent in CDSL, which uses a free-text remark instead.

Common exam traps

  • The URF is submitted by the pledgor to close a pledge — contrast unilateral closure, where the pledgee submits the closing instruction instead.
  • PRF, URF and IRF are all retained for a minimum of five years — not the eight years that applies to a DP's general records.
  • CDSL does not show the workbook's listed rejection reasons in its system — it uses a free-text remark field instead, a genuine NSDL/CDSL difference.

Check yourself

  1. 1.For how long must a DP maintain copies of Pledge Request Forms, Unpledge Request Forms and Invocation Request Forms?

    1. a)One year
    2. b)Three years
    3. c)A minimum period of 5 years
    4. d)Permanently, with no minimum prescribed
    Show the answer

    Answer: (c) A minimum period of 5 years

    The DP shall maintain copies of all Pledge Request Forms (PRF), Unpledge Request Forms (URF) and Invocation Request Forms (IRF) for a minimum period of 5 years, or any such period informed by SEBI/NSDL/CDSL from time to time.

    Note that it is a minimum — option D is wrong not because permanent retention would be improper, but because a period is prescribed.

    This sits in the same checklist as three other DP duties worth memorising together: the instruction form must be submitted in duplicate, the pledgor DP and pledgee DP must each create at least two users to implement the maker-checker feature, and the request for confirmation of pledge must be given before the closure date mentioned in the instruction form — not applicable in the case of NSDL.

  2. 2.According to the DP's checklist for processing a pledge / hypothecation request, which of the following must the DP ensure?

    1. a)The instruction form is submitted in duplicate, and the pledgor DP and pledgee DP each create at least two users to implement the maker-checker feature
    2. b)The instruction form is submitted in triplicate, one copy going to SEBI
    3. c)A single user may enter and verify the request, provided the form is signed by all holders
    4. d)Pledge forms are kept for a minimum of 8 years
    Show the answer

    Answer: (a) The instruction form is submitted in duplicate, and the pledgor DP and pledgee DP each create at least two users to implement the maker-checker feature

    Box 9.1 lists: "Ensure that the instruction form is submitted in duplicate" and "Pledgor DP and Pledgee DP each shall create at least two users to implement the Maker-checker feature. Ensure that all compulsory fields in the instruction form are entered."

    • B is wrong: the form is in duplicate, and nothing goes to SEBI.
    • C defeats the purpose of maker-checker. One user enters (maker) and another verifies (checker). The invocation procedure shows this too: the DP enters (maker) the invocation request details ... and verifies (checker) the details.
    • D has the wrong period. The DP must maintain copies of all PRF, URF and IRF for a minimum period of 5 years or any such period that SEBI / NSDL / CDSL may inform.

    The checklist also requires that, except in NSDL, the request for confirmation of pledge is given before the closure date mentioned in the instruction form.

Where this is taught

Free preparation for NISM Series VI

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